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Question 7 (2 points) Sean is the sole shareholder of a regular C corporation, and Ben...
Tomas owns a sole proprietorship, and Lucy is the sole sharehalder of a C corporation. In...
Tomas owns a sole proprietorship, and Lucy is the sole sharehalder of a C corporation. In the current year, both businesses make a net profit of $60,000. Neither business distributes any funds to the owners in the year. For the current year, Tomas must report $60,000 of income on his individual tax return, but Lucy is not required to report any income from the corporation on her individual tax return. True Ovalse
9 Matt, the sole shareholder of Pastel Corporation (a C corporation), has the corporation pay him...
9 Matt, the sole shareholder of Pastel Corporation (a C corporation), has the corporation pay him a salary of $600,000 in the current year. The Tax Court has held that $200,000 represents unreasonable compensation. Matt must report a salary of $400,000 and a dividend of $200,000 on his individual tax return. True False
John is owner of a sole proprietorship (Bogs Dogs) and shareholder of (Cop Tops). Both of...
John is owner of a sole proprietorship (Bogs Dogs) and shareholder of (Cop Tops). Both of these companies sold capital assets and experienced a $10,000 capital loss and neither had capital income. Evaluate the entities and determine if it can be deducted, how much, and on which return will the capital loss be able to deducted to reduce his taxable income related to the entity type. Which of the following statements best describes the tax treatment allowed for each entity....
QUESTION 7 A corporation sells property (basis of $175,000) to its sole shareholder for $125,000, the...
QUESTION 7 A corporation sells property (basis of $175,000) to its sole shareholder for $125,000, the fair market value of the property. With respect to the sale, The shareholder has a basis of S175,000 in the property. The corporation has a tax loss of S50,000. The corporation does not recognize a tax loss but reduces its E & P account $50,000. The shareholder has a constructive dividend of $50,000. None of the above QUESTION 8 Assume taxable income is the...
Rajib is the sole shareholder of Cardinal Corporation, a calendar vear S corporation. In the current...
Rajib is the sole shareholder of Cardinal Corporation, a calendar vear S corporation. In the current year, Cardinal generated a net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed s80,000 to Rajib. Rajib must report the Cardinal Corporation profit of $350.000 on his Federal income tax return. True Faise
I need dividends income tax for sasha to complete this question in part b. Problem 3-31...
I need dividends income tax for sasha to complete this
question in part b.
Problem 3-31 (LO. 1) In the current year, Azure Company has $350.000 of net operating income before deducting any compensation or other payment to its sole owner, Sasha. In addition, Arure has interest on municipal bonds of $25,000. Sasha has significant income from other sources and is in the 37% marginal tax bracket Based on this information, determine the income tax consequences to Azure Company and...
Problem 17-32 (LO. 3, 7) Benton Company (BC), a calendar year entity, has one owner, who...
Problem 17-32 (LO. 3, 7) Benton Company (BC), a calendar year entity, has one owner, who is in the 37% Federal income tax bracket (any net capital gains or dividends would be taxed at a 20% rate). BC's gross income is $395,000, and its ordinary trade or business deductions are $245,000. Ignore the standard deduction (or itemized deductions) and the deduction for qualified business income. If required, round computations to the nearest dollar. a. BC is operated as a proprietorship,...
Chart of Entity Comparison Sole Proprietor Partnership C Corporation S Corporation LLC Legal Status Same entity...
Chart of Entity Comparison Sole Proprietor Partnership C Corporation S Corporation LLC Legal Status Same entity as owner Separate entity from owner Separate entity from owner Separate entity from owner Separate entity from owner Tax Year Same as owner Majority interest rules; principal partner rules; or the least aggregate deferral of income rule; exceptions may be the business purpose of 444 election Calendar or fiscal year Calendar year; 444 election; or business purpose demonstrated Depends on tax status as sole...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the bu...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the business. As such, Ben and Allie agree that immediately after the incorporation of the company and the issuance of stock, Ben will sell Allie half of his shares in the company. Ben contributes inventory (FMV $60,000, Basis $30,000), and accounts receivable (FMV $40,000, Basis $40,000) to the corporation for 50% of the stock, and Jerry contributes equipment (FMV $60,000, Basis...
In the current year, Azure Company has $350,000 of net operating income before deducting any compensation...
In the current year, Azure Company has $350,000 of net operating income before deducting any compensation or other payment to its sole owner, Sasha. In addition, Azure has an interest on municipal bonds of $25,000. Sasha has significant income from other sources and is in the 37% marginal tax bracket. Based on this information, determine the income tax consequences to Azure Company and to Sasha during the year for each of the following independent situations. (Ignore the deduction for qualified...
Tomas owns a sole proprietorship, and Lucy is the sole sharehalder of a C corporation. In the current year, both businesses make a net profit of $60,000. Neither business distributes any funds to the owners in the year. For the current year, Tomas must report $60,000 of income on his individual tax return, but Lucy is not required to report any income from the corporation on her individual tax return. True Ovalse
John is owner of a sole proprietorship (Bogs Dogs) and shareholder of (Cop Tops). Both of these companies sold capital assets and experienced a $10,000 capital loss and neither had capital income. Evaluate the entities and determine if it can be deducted, how much, and on which return will the capital loss be able to deducted to reduce his taxable income related to the entity type. Which of the following statements best describes the tax treatment allowed for each entity....
QUESTION 7 A corporation sells property (basis of $175,000) to its sole shareholder for $125,000, the fair market value of the property. With respect to the sale, The shareholder has a basis of S175,000 in the property. The corporation has a tax loss of S50,000. The corporation does not recognize a tax loss but reduces its E & P account $50,000. The shareholder has a constructive dividend of $50,000. None of the above QUESTION 8 Assume taxable income is the...
Rajib is the sole shareholder of Cardinal Corporation, a calendar vear S corporation. In the current year, Cardinal generated a net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed s80,000 to Rajib. Rajib must report the Cardinal Corporation profit of $350.000 on his Federal income tax return. True Faise
I need dividends income tax for sasha to complete this
question in part b.
Problem 3-31 (LO. 1) In the current year, Azure Company has $350.000 of net operating income before deducting any compensation or other payment to its sole owner, Sasha. In addition, Arure has interest on municipal bonds of $25,000. Sasha has significant income from other sources and is in the 37% marginal tax bracket Based on this information, determine the income tax consequences to Azure Company and...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the business. As such, Ben and Allie agree that immediately after the incorporation of the company and the issuance of stock, Ben will sell Allie half of his shares in the company. Ben contributes inventory (FMV $60,000, Basis $30,000), and accounts receivable (FMV $40,000, Basis $40,000) to the corporation for 50% of the stock, and Jerry contributes equipment (FMV $60,000, Basis...
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